29 Apr 19

TRAIN TO NOWHERE: Falling production has led to more than 1000 mineworkers losing their jobs in the past year. THE coal rout is deepening with production cuts accounting for more than 70 new job losses at the Mount Owen open-cut mine.

Mount Owen – midway between Singleton and Muswellbrook – is owned by the Swiss-based resources giant GlencoreXstrata and managed by contract mining company Thiess.

Construction, Forestry, Mining and Energy Union district president Peter Jordan said 55 mineworker positions, six tradespeople and 12 contractors had been earmarked to go.

Figures show more than 1000 Hunter and Gunnedah miners have lost jobs since last year.

These figures do not include the jobs lost in downstream suppliers to the industry.

The Australian Coal Association says 9000 jobs have been lost from the NSW and Queensland industries in the past 15months and recent research indicates that at least half the coal leaving Newcastle is doing so at a loss.

Mount Owen has approval to produce up to 10million tonnes of coal a year and Mr Jordan said Xstrata was cutting production by 5per cent.

‘‘There’ll be a call for voluntary redundancies but I don’t think there’d be enough volunteers to accommodate those sorts of numbers,’’ Mr Jordan said.

On figures supplied by Xstrata the 73 jobs amounts to nearly 20per cent of the workforce.

An Xstrata spokesman said the Mount Owen cuts were a response to ‘‘difficult market conditions’’.

A spokesman for Thiess said Mount Owen was ‘‘decreasing total coal production by scaling back some of its operating areas in response to industry-wide pressures, including a lower coal price’’.

‘‘We appreciate the impact this will have on some of our employees and their families,’’ the Thiess spokesman said.

‘‘We are making every effort to proactively consult with the workforce to ensure they have a full range of support services.’’

Brisbane-based WorkPac, which supplies the 12 contract positions, declined to comment.

By confirming the production cuts, GlencoreXstrata is directly confronting the oversupply of thermal coal that is helping drive down prices to unprofitable levels.

Another Xstrata mine, Ravensworth underground, shed about 35 positions in October last year, although most of those affected were redeployed.

Whitehaven retrenched 40 Gunnedah-area mineworkers in March and Peabody’s Wambo open-cut shed about 40 jobs in July last year, citing ‘‘increased cost efficiencies’’.

Exports from Newcastle had been expected to more than double to nearly 300million tonnes a year by the end of the decade.

But the bursting of the minerals boom has thrown such predictions into disarray, with some major Hunter mining projects now delayed or under a cloud.

Port Waratah Coal Services put its controversial T4 loader on hold at the start of the month, saying revised forecasts mean the new loader is unlikely to be needed for at least five years.

One of the mines that would have fed that loader, Rio Tinto’s Mount Pleasant open-cut, is yet to be formally confirmed.

Figures from the Hunter Valley Coal Chain Co-ordinator, which oversees the movement of export coal, show production is still up on this time last year, with 55.9million tonnes of coal arriving at Newcastle, compared with 50.2million tonnes during the same period last year.

One of the major differences between this downturn and previous coal gluts is the presence of ‘‘take or pay’’ contracts, which mean coal companies must pay transport providers an agreed amount, even if they ship less coal than expected.

This effect, which is believed to be adding as much as $15 a tonne to coal production costs, discourages companies from cutting production in an effort to drive up prices by causing a shortage.

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